China Legal Update – October 18, 2023

1. Cyber security: Internet Infringement will be subject to key supervision

On September 15, the Central Cyberspace Affairs Commission (“CAC”) issued the Guiding Opinions on Further Regulating the Reporting of Internet Infringement Information (the “Opinions”).

The Opinions focuses on three main aspects: protecting the legitimate internet rights of citizens, protecting the legitimate internet rights of enterprises, and emphasizing the responsibilities of online platforms.

As to the protection of the legitimate internet rights of citizens, the Opinions outlines the misconducts including leakage of personal information, illegal theft and peddling of personal information, act of counterfeiting and impersonating others to publish the information and express the opinions, act of defacing or improper use of others’ portrait, and act of insulting, defaming, slandering, spreading rumors and smearing others’ reputation. The authorities will establish an express lane system for complaint against cyber-violence information and strengthen protection against the needed including the minors, the female group, the disabled and the seniors.

With regard to the protection of legitimate internet rights of enterprises, the Opinions aims to establish a dedicated online reporting channel for enterprise-related internet infringement information, strengthen reporting verification mechanism, enhance policy guidance for reporting, and prioritize investigating and handling false and illegal information that tarnishes the reputation of businesses and entrepreneurs.

In relation to the responsibilities of online platforms, the Opinions requires the platforms to set up a reporting channel and scrutinize the misconducts. In addition, the platform is obliged to push forward information disclosure to promote the effectiveness of internet infringement reporting.

The Opinions intends to safeguard the legitimate internet rights and interests of netizens and create a clean and safe cyberspace.

2. Enterprise registration: New changes for registration of enterprise names

On August 29, The State Administration for Market Regulation (“SAMR”) issued the revised Implementing Measures for the Administrative Provisions on the Registration of Enterprise Names  (the “Measures”), with effect from October 1, 2023.

Compared with the previous version issued in 2004, the revisions of the Measures focus on four areas including:

1) specifying the enterprise names requirements

The Measures permits the use of words including “China”, “Chinese”, “Central”, “National” (“zhongguo”, “zhonghua”, “zhongyang”, “quanguo”, “guojia”) only after strict review. In the previous version, only the enterprises set up by the State Council could use these names.

Besides, the Measures forbids the use of words related to major national strategic policies, misleading words such as “national level”, “highest level” or “best”, same or similar words of prior names of others in the same industry with certain influence, words that are expressly or implicitly non-profit organizations and others prohibited by laws and regulations. The Measures also specify the normative requirements for the constituent elements of enterprise names, enterprises shall include the enterprise type at the end of enterprise name.

2) optimizing the independent declaration service of enterprise names

In order to protect companies from malicious behaviors, the Measures adds new requirements for the declaration of enterprise names. Companies shall not maliciously hoard enterprise names and occupy name resources not for the purpose of self-use, submit false materials or adopt other fraudulent means for self-declaration of enterprise names, intentionally declare enterprise names that are similar to others’ prior names that have a certain degree of influence, and intentionally declare the unlawful enterprise names.

3) strengthening the use, supervision, and management of enterprise names  

The use of enterprise names shall comply with laws and regulations and shall not infringe upon prior legal rights and interests of others by imitation or confusion.

The registration authority may promptly correct the unlawful behaviors if the enterprise names are not in accordance with the regulations and order the enterprise to change the name. The change shall be conducted within 30 days upon receiving the correction decision of the authority. Any aforesaid enterprise delays the registration of name change will be listed in the List of Abnormal Operations. The record will be published in public, and the enterprises would be restricted or prohibited in the government procurement, project bidding and tendering, state-owned land granting, and awarding of honors and titles.

4) improving the administrative adjudication mechanism for name disputes.

An enterprise may file a lawsuit before a court or request the registration authority to resolve the dispute if it deems other enterprises has infringed its lawful rights of enterprise name. Compared with the court trial, the administrative adjudication is shorter in time and cheaper in cost. Meanwhile, the administrative authority is more professional in the correspondent area. The Measures prescribes the specific rules and procedural specifications of the administrative adjudication, including the duration for submission of the materials, the reasons of refusal to accept the adjudication and the duration of the adjudication, the mediation procedure and the adjudication results, making it clearer for enterprises to guard legitimate rights and interests.

Compared with the previous version, enterprise in violation of the Measures will be subject to fines, other administrative or criminal punishments.

3. Intellectual Property: Classification System for Green Technology Patents established

On August 30, the China National Intellectual Property Administration (“CNIPA”) issued the Classification System for Green Technology Patents  (the “System”).

The System divides green technologies into four levels of technology branches. The first level branch includes 12 technologies, which are listed as follows:

1) Fossil energy carbon reduction;

2) Clean energy;

3) Energy storage;

4) Energy and water conservation;

5) Greenhouse gas capture, utilization and storage;

6) Recycling;

7) Environmentally friendly materials;

8) Pollution control and governance;

9) Green transportation;

10) Green agriculture/forestry;

11) Green building;

12) Green management and design.

The System is based upon the International Patent Classification System and built on the list of green technologies of the World Intellectual Property Organization. The goal is to promote international communications and transformation of green technology patents, and advance green technology innovation and patent industrialization.